DIA collection at risk in Detroit woes

The Detroit Institute of Arts’ collection could be sold to help satisfy creditors if the financially troubled city of Detroit seeks bankruptcy protection, officials said.

The city’s state-appointed emergency manager Kevyn Orr is considering whether the collection should be considered city assets that could be used to cover Detroit’s long-term debt, the Detroit Free Press reported Friday. That debt is estimated at more than $14 billion.

Orr spokesman Bill Nowling said that Orr told the museum it may face exposure to creditors if Detroit seeks bankruptcy protection. Nowling said the notification is a “precautionary measure” and there’s “no plan on the table to sell any asset of the city.”

“We have no interest in selling art,” Nowling told the newspaper. “I want to make that pretty clear. But it is an asset of the city to a certain degree. We’ve got a responsibility under the act to rationalize that asset, to make sure we understand what’s it’s worth.

Advertisement

“We have to look at everything on the table.”

Amid the possibility, the museum said it has hired New York bankruptcy attorney Richard Levin to suggest ways to protect the collection from possible losses. Levin has been involved in bankruptcy case involving General Motors and other high-profile cases.

“We are standing by our contention and belief that we hold the collection in trust for the public,” said DIA Executive Vice President Annmarie Erickson. “And although to some it may seem to be an asset, we do not.”

The city owns the Detroit Institute of Arts’ building and collection, while daily operations are overseen by a nonprofit. The scope of Orr’s power as an emergency manager to sell the collection or any other major assets, such as the city’s water department, likely would be tested in court.

Republican Gov. Rick Snyder in March appointed Orr as emergency manager, giving Orr the final say on Detroit’s fiscal matters. The city’s budget deficit could reach $380 million by July 1, it could run out of cash before the end of the year, and bankruptcy hasn’t been ruled out.

Under a Chapter 9 bankruptcy filing, neither a judge nor creditors can force the city to liquidate its assets, but bankruptcy experts tell the newspaper that a judge and creditors could push for a sale. Some creditors have already asked Orr whether the DIA collection is “on the table,” Nowling said.

Billionaire developer A. Alfred Taubman, a patron of the museum, said that “it would be a crime” to sell any of the DIA’s collection to satisfy city creditors.

“I’m sure Mr. Orr, once he thinks about it, will certainly not choose that as one of the assets,” Taubman said. “It’s not just an asset of Detroit. It’s an asset of the country.”